TORONTO, May 2023 - The automobile industry has experienced significant and critical changes throughout the COVID-19 pandemic. Consumers are increasingly becoming online focused in their approach to automobile shopping. Dealerships and lead generators have expanded their digital presence and are making use of new forms of online shopping experiences designed to induce consumers into purchasing a vehicle. While existing consumer protection measures cover parts of these digital practices, to a certain degree, clear protections which are explicitly directed towards digital automotive purchases are; however, less clearly defined.
In June 2021, the ACC began researching the use of digital shopping practices by the automotive industry, including: current online practices that are being used by the automotive industry; the extent of these practices and the risks they pose to consumers; and the extent of regulation that explicitly addresses online automobile retailing. The ultimate task was to draft a set of recommendations that consumers, dealerships, manufacturers, and government bodies could use to help protect consumers from any potential financial harm.
A few important discoveries were revealed about online automotive retailing following a review of the previously published literature on this subject and interviews with various stakeholders. An increasing number of consumers are open to purchasing a vehicle online. Dealerships are beginning to offer comprehensive online vehicle shopping options, including e-signing of contracts to purchase a vehicle. Unethical sales practices that may cause financial harm to consumers continue to be problematic for online vehicle sales.
The ACC commissioned Decision Point Research to conduct a Canada-wide survey. The survey targeted consumers in order to learn about their vehicle-buying experiences.
The consumer survey data revealed that: 1) 34 percent of consumers claim the online price for the purchased vehicle did not include all the necessary fees and charges. 2) 60 percent of consumers found it either challenging or very challenging to get the dealership to honour the online price. 3) 45 percent of consumers claim that the dealership tried to switch or upsell them into a different vehicle to what they viewed online. 4) 40 percent of consumers were able to use a digital signature to purchase their vehicle and sign paperwork online. 5) 28 percent of consumers who purchased a vehicle had some form of complaint or dispute with the dealership.
Based on the findings of the report, the ACC is making recommendations in a number of areas: Regulators should expand the use of consumer education campaigns, introduce a cancellation /exchange policy for online purchases, and expand the use of substantial penalties and disciplinary action for non-compliant dealerships. Require lead generators and automobile manufacturers to comply with all-in price advertising and mandatory disclosure requirements. All-in price advertising and the use of mandatory disclosures in advertising should be expanded to all provinces. Regulatory authorities should also consider streamlining and standardizing the enforcement process, the penalties, and the costs across all provinces. For more information on the ACC’s recommendations, see page 22 of the report.